Small Business Participation

[Tom Kelly <kelly.tom@epa.gov>]

Good morning, everyone.

I serve as EPA's Small Business Advocacy Chair (SBAC).  In a few messages, I intend to lay out the current methods EPA employs to involve small businesses in our rulemaking, in the hope that you may have suggestions on how we can broaden and deepen the investment of this key constituency in formulating the regulations that may affect them most.

The role of the SBAC is described in a piece of legislation passed in 1996 called SBREFA.  That stands for Small Business Regulatory Enforcement Fairness Act, and it made substantial amendments to the 1980 Regulatory Flexibility Act (RFA).  The purpose of the RFA is to level the playing field for small businesses that fid themselves frequently at the mercy of their larger competitors when Federal regulators write rules that could be carried out by big, sophisticated, and well-capitalized companies, but not by the little guys.  Paradoxically, some big businesses actively lobby for strict requirements in the expectation that they will force smaller, "niche" competitors from the field.  

The RFA says that, whenever an agency is about to issue a proposal that will impose a "significant economic impact on a substantial number of small entities," the agency must conduct outreach to those small entities, prepare a Regulatory Flexibility Analysis, and consider significant regulatory alternatives that will minimize burden on small entities.

"Small entities" are small businesses, communities, or non-profit organizations.  Small businesses are defined by the Small Business Administration on the basis of annual revenues or the number of employees.  The SBA definitions are extremely inclusive, and account for more than 90% of American businesses. Given the expansiveness of these definitions, writing a rule that achieves meaningful environmental improvement while, at the same time, allowing less burdensome compliance options for small businesses can pose quite a challenge.  More in my next message.